11 May 2026
What are the latest Logistics Hotspots to optimize your Asia distribution network?
What are the latest Logistics Hotspots to optimize your Asia distribution network?
Cost pressures are driving consumer goods companies in Asia to relook at their distribution network setups. One way to do that is to look beyond the traditional DC locations such as Singapore, Hong Kong and Shanghai, and identify new logistics hotspots that offer lower cost at similar (or even better) service levels. Based on the innovative work we do with our clients, BCI has identified 4 such logistics hotspots. This article will share key insights into why these 4 locations should be on your radar screen and how they can enable you to optimize your Asian distribution network strategy.
Logistics hotpot 1 - Singapore vs. Johor Bahru (JB), Malaysia
While the shift from Hong Kong to Shenzhen is nothing new anymore, a similar shift from Singapore to Johor Bahru is currently ongoing. Given the significantly lower cost in JB and the reasonable overall quality of the business environment (custom, infrastructure, labor etc.), JB is now a serious contender for your next DC. Any company without legacy should strongly consider to put its next DC in JB, and any company with a legacy DC in Singapore where renewal of the contract is coming up soon should do a detailed analysis of the pros and cons of staying in SG.
Logistics Hotspot 2 - Center of China for your next domestic omnichannel DC
By going from a point-to-point network to a hub-and-spoke model, carriers like SF Express have made next day delivery for any city in China a cost-effective and reliable model. Such parcel-carrier hubs are now available in the center of China, typically in Hunan, where labor and rental cost is much lower. This enables consumer goods brands to setup their DC for both domestic ecommerce and store deliveries across China next to such parcel-carrier hub, rather than the classic high cost Shenzhen, Shanghai or Beijing locations.
Logistics hotspot 3 – India as a new Pan-Asian Logistics Hotspot
Most companies decide where to put their DC in India only based on the local domestic market demand. Mumbai and Chennai are both strong and comparable candidates for such domestic distribution focussed setup. However, India should not be viewed only as a consumption market. Its geographic position, improved infrastructure, and competitive costs make it a strong candidate for regional (Pan-Asia) or even global fulfilment centers. Especially Chennai with its ocean port and well-connected airport should be considered for any new RDC location in your Asia network.
Logistics Hotspot 4 - Serve the ANZ market from a domestic or off-shore DC
Australia-New Zealand is a significant market but running a local DC proves difficult for many brands. It is difficult to cover the vast geography from one location, leading to high local transport cost, and also the performance of 3PLs is not always as desired.
Companies should consider serving the ANZ market via an off-shore DC (in for example Singapore, Malaysia). For companies using ocean freight, secondary ports can be used to reduce cost while maintaining reasonable lead times. It avoids the challenges of having to operate a local DC, and inland freight cost are lower. For companies using airfreight, the reduction on local warehousing cost can offset the higher airfreight cost until higher volumes necessitate a local DC again.
By staying on top of the latest trends in logistics hotspots, consumer goods companies can make use of these new low cost -same service level locations and continue to optimize their distribution networks in the Asia region.
If you like to discuss in more detail what this means for you Asian distribution network, please contact either BCI Global’s Luc Kremers, VP Asia Pacific via luc.kremers@bciglobal.com or Pieter de Wit, Partner via Pieter.wit@bciglobal.com.
More information on our recent webinar ‘New logistics hot spots in Asia’ is available here where you also can request a personal copy of the presentation deck.
